South African Miners Cashing In On Strike Fears

Preying on fears strike contagion could sweep across the landscape of the South African coal mining sector, the National Union of Mineworkers will table new wage demands for the country’s coal miners on September 28.

Sept. 25, 2012 - PRLog -- Wage demands, that have their origin in a much-feared strike contagion in South Africa’s mining sector, have spread to the country’s coal mining sector even though its workers are well-paid compared to the platinum and gold mining sectors.

The National Union of Mineworkers (NUM), the country’s largest union, is to meet with the Chamber of Mines of SA on September 28 to submit wage demands from its coal-producing members. This follows an agreement between UK-listed platinum producer, Lonmin, with its worker representatives operating outside of the bargaining units in the platinum sector, for an 11% to 22% increase depending upon the job grades. The wage increase outstrips other agreements in the mining sector.

An independent labour negotiator told the South African Coal Report (SACR) he doubted whether the NUM would get this past the chamber but it was indicative of NUM wanting to demonstrate it remained a force as a labour movement after disgruntled miners in the platinum and gold sectors circumvented its structures to press home demands of their own.

Last week, there were nearly 20,000 workers on illegal strikes in the gold sector while the situation at mines owned by Impala Platinum and Anglo American Platinum remained tense with either low productivity, or low turnouts.

“The NUM is sitting in a corner,” said the labour negotiator regarding fresh demands for coal and gold mine workers. “It’s probably rhetoric to show that it is doing something. AMCU [the Associated Mineworkers and Construction Union] has made in-roads, so this is probably a pre-emptive strike before it [AMCU] moves into the coal sector,” he said.

He added that the outcome would probably involve coal employers agreeing to move forward by several months annual wage negotiations.

“But watch out for the smoke and mirrors,” the labour negotiator told SACR. “Agreeing to have the discussions will not be the same as implementation of wage improvements. That will probably stay the same,” he said.

Bevan Jones, GM of London Commodity Brokers’ Johannesburg office, said there wasn’t much negotiating space for many of South Africa’s coal mining firms because margins were under pressure, a consequence of the depressed thermal coal price.

“The coal sector guys are close to marginal now. In the case of underground miners, there’s a high degree of mechanisation while the jobs there are also quite specialised and probably quite well paid,” he said.

“However, I’m not so sure with the junior mining firms, and whether their workers are unionised or not. But unrealistic wage demands could put some of these guys out of business,” he said.

Export parity prices in the South African market were currently sitting at R500/t ($US60.75) FOR. Even a 10% increase in wages, equal to R50/t off the selling price would put miners out of business, especially as there would be no guarantee of improved productivity.

On top of that, there’s been a slow-down in the performance of Transnet Freight Rail, a division of state-owned logistics company, Transnet, which means that it’s difficult for the country’s coal miners to get more product to Richards Bay Coal Terminal. “With volumes down, costs will only be rising for the coal miners,” a source said.

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